van Vuuren v van Niekerk[2007] QDC 148

[2007] QDC 148

DISTRICT COURT

JUDGE RACKEMANN

Appeal No 1956 of 2003

BRISBANE

DATE 25/06/2007

JUDGMENT

HIS HONOUR:  The plaintiff commenced proceedings on the 17th of June 2003 claiming $176,000 together with interest, being monies alleged owing by the defendant to the plaintiff pursuant to an agreement. 

The subject application is for leave to proceed pursuant to Rule 389 subsection 2 of the UCPR.  The defendant resists that and submits that the action ought to be struck out for want of prosecution.  The action was commenced promptly and progressed with reasonable expedition in the early stages before becoming dormant. 

The agreement upon which the claimant sues is one alleged to be recorded in writing on the 28th of April 2003, consequent upon a meeting between the plaintiff, the defendant and another.  During that meeting, the plaintiff had maintained that the defendant and the other person were liable to him with respect to a failed investment made in late 2002.  It is alleged that the defendant agreed to pay the plaintiff the sum of $176,000 together with the interest at the rate of 4.75 per cent.  Payment was not made despite demand on the 27th of May 2003 and the 5th of June 2003.

The defendant filed a Notice of Intention to Defend and Defence on the 18th of July 2003 in which he admitted to attending the meeting of the 28th of April 2003.  He also admitted that the plaintiff and his wife had expressed the view that the defendant and the other person were liable to the defendant for his lost investment and admitted signing the document of the 28th of April 2003.  That document, on its face, purports to be an acknowledgement by the defendant that he owed the plaintiff the sum of $176,000 together with an undertaking to pay that amount together with interest at a rate of 4.75 per cent. 

The defendant however denies that he was, in truth, liable to the plaintiff with respect to the failed investment.  He asserts that the hand-written instrument was executed under coercion, was not in resolution of the plaintiff's claim and did not comply with the provisions of the Property Law Act with respect to Deeds. 

On the 18th of August 2003, the plaintiff filed an application returnable on the 26th August 2003, seeking further and better particulars of the defence.  The Court made orders in accordance with the application requiring further and better particulars within 14 days.  The defendant did not comply with those orders.

On the 19th of September 2003, the plaintiff filed an application seeking that the defence be struck out and judgment entered in his favour or, in the alternative,  further orders with respect to the provision of further and better particulars and the carrying out of disclosure.  That application was originally returnable on the 1st of October 2003 and was adjourned to the 9th of October 2003.  The defendant filed further and better particulars on the 8th of October 2003 and on the following day; orders were made, by consent, dismissing the application.  The defendant provided its list of documents on 28 October 2003. 

It appears that no further step was then taken in the action by either party for some years.  Ultimately, in October 2006, the plaintiff's solicitors began corresponding with the defendant's solicitors to arrange an inspection of documents.  This elicited a response that the defendant's solicitor on the record no longer held instructions.  The plaintiff's solicitors responded with a letter pursuant to Rule 444.  Ultimately, in November 2006, the defendant's new solicitors confirmed that they now acted for the defendant, advised that they would finalise a change of solicitors in due course and drew the plaintiff's attention to Rule 389 sub rule 2.  The plaintiff took legal advice and brought the subject application one month after the defendant's new solicitors filed the change of solicitors. 

On an application for leave to proceed, the plaintiff must show that there is good reason for excepting proceedings from the general prohibition, contained in Rule 389 sub rule 2, on the taking of a fresh step when more than two years has elapsed since the last step was taken.  The process for the Court is to identify the factors relevant to whether there is a good reason for excepting the proceeding from the prohibition, assess the weight to be given to each of the factors in the circumstances of the case and then to determine whether, on balance, there is good reason for making the order.  (See Bazley v. Queensland (2001) QSC 476 paragraphs 21 - 22.) 

A helpful checklist of relevant considerations in determining whether to grant leave is set out in the reasons of Atkinson J, in Tyler v. Custom Credit Corporation (2000) QCA 178.  As Atkinson J observed however, the Courts discretion is not fettered by rigid rules but should take into account all of the relevant circumstances of a particular case.

Counsel for the respondent emphasized what he submitted was the absence of an adequate explanation for delay.  The explanation deposed to by the plaintiff is one of financial hardship caused by the failure or the refusal of the defendant to pay the sum, which is the subject of the litigation.  In particular, the plaintiff deposes that:

"10. The failure by the defendant to pay the monies that he agreed to pay me has caused both myself and my family significant financial hardship, which has made it difficult for me to prosecute this litigation over the last few years.

11. Since the last step was taken in these proceedings, I have established my own business to overcome the financial hardship caused to my family.

12. The business that I established required me to invest what funds I had left after the losses suffered as a result of the defendant's actions, which has prevented me from pursuing the claim before this Honourable Court.

13. I am now in a position to proceed with the claim against the defendant to recover the money that he had promised to pay me and undertake to this Honourable Court to prosecute the claim expeditiously." 

Counsel for the defendant attacked the adequacy of that explanation.  He submitted that there was an inconsistency between the claim of financial hardship on the one-hand and the plaintiff's ability to devote financial resources to a business enterprise on the other.  Further, he pointed to the failure of the plaintiff to descend to detail in relation to his available resources in 2003 and subsequently, the nature of the business established and why that business required a level of financial commitment that left him unable to pursue, in any respect whatsoever, his claim during the period of delay.  He submitted in effect, that the failure to go into detail on the extent of the changed position would give the Court no confidence that the action would be pursued with expedition were leave now to be granted. 

It was submitted by counsel for the defendant that a cogent and sufficiently detailed explanation is a "fundamental threshold" issue and "absolutely fundamental" in respect of the determination of both applications.  Whether there is a satisfactory explanation for the delay is, of course, a relevant consideration, but it is not a condition precedent to the granting of leave to proceed.  (See Dempsey v. Dauber [1991] QdR 418) 

The explanation given in this case may fairly be described as sparse and lacking in detail but I am prepared to accept that it is genuine.  I note that the plaintiff's solicitor deposed that the brief delivered to counsel on the 17th of December 2003 was subsequently returned because:

"We received no further instructions from the client to proceed with the action for the reasons set out in the affidavit of Mr Van Vuuren.".

In determining the weight which I should attach to the explanation which has been offered, I have had regard, in diminishing that weight, to its sparseness and lack of detail but I do not regard those matters as necessarily fatal to the plaintiff's application in the circumstances. 

Counsel for the plaintiff emphasised the lack of any substantial prejudice which would be occasioned by the defendant in the event that leave was granted.  The defendant's affidavit does not point to any specific prejudice which would be suffered in the conduct of his case were leave now to be granted.  In so far as potential effects of a grant of leave is concerned, he deposed that:

"6. Because nothing had happened in this proceeding for three years or more, I had formed the view that I could get on with my life without concerning myself about having to defend these proceedings. I had, accordingly, sought to put the events relevant to this proceeding behind me.

7. The current of uncertainty caused by the plaintiff's attempt to resurrect this proceeding has caused me and my wife considerable stress, and has affected my ability to plan for the future free from the concern and anxiety that this proceeding had previously caused me."

In Cooper v. Hopgood and Ganim [1999] 2 QdR 113 it was said by McPherson JA, at page 124, that:

"Ordinary members of the community are entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them."

It has been said however, that this consideration may be of less significance than prejudice which affects whether there can be a fair trial of the matters in issue. 

(See Bazley v. Queensland (supra) at paragraph 74)

In so far as possible prejudice to a fair trial is concerned, counsel for the defendant sought to rely upon the well known remarks of McHugh J in Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 at 551 concerning the prejudice which may be occasioned as a result of lengthy delay.  Counsel for the defendant drew attention to the fact that, in this case, recollections of earlier oral conversations will be important. 

The potential for lengthy delay to cause prejudice to a fair trial is obvious.  However, as has been recognised on other occasions, Taylor's case does not establish a rule that no fair trial can be had whenever there has been substantial delay.  (See Quinlan v. Rothwell (2002) 1 QdR 647, per de Jersey CJ, at 652 per Thomas JA at 659, per Mackenzie J at 661.)

In this case the proceedings were commenced shortly after the relevant events about which evidence would need to be given.  That has at least two consequences.  Firstly the nature of the allegations and of the claim were known in some detail by the defendant reasonably soon after the events relating to the alleged cause of action arose.  Accordingly there was an occasion to take instructions and an opportunity to obtain statements relatively soon after the events in question.

Secondly, the passage of time since the relevant events is not much longer than the delay which has occurred in the proceedings itself.  If, for example, the plaintiff had left it until towards the end of the limitation period to commence proceedings and then delayed, the passage of time since the relevant events could have been much longer and the likelihood of prejudice much greater.

The passage of time since the relevant events in this case is in the order of four years.  A delay of four years in circumstances where, because of the prompt institution of proceedings, the defendant knew of the existence and nature of the claim - one which is within a reasonably contained compass - from an early stage, may be contrasted with, for example, the situation in Taylor's case, where the applicant sought an extension of time under the Limitation of Actions Act (1974), to first commence proceedings in respect of metical negligence alleged to have occurred more than 15 years beforehand.  The delay and the potential for real prejudice in this case is of a different order of magnitude. 

In the circumstances, I do not consider that the passage of time has had a substantial detrimental impact upon the prospects of a fair trial and I do not consider that the defendant would suffer substantial prejudice otherwise in the event that leave is granted.

The plaintiff's action is relatively straight forward and there is no reason to be pessimistic about its prospects of success.  Pleadings have closed.  Disclosure has commenced, although inspection has yet to be undertaken.  It is an action which, it would seem, could be ready for trial in the not too distant future, if leave were granted. 

During the period of the delay, the defendant did not seek directions or take other steps in an effort to progress the matter, but there was no onus on him to do so.  The delay is, I accept, attributable to the plaintiff and indeed to the plaintiff personally, rather than to any dilatory contact on the part of his lawyers. 

While the plaintiff allowed the action to go to sleep for some years, it is not a case where there has been disobedience with Court orders or directions on his part and nor has there been periods of significant delay prior to the latter part of 2003. 

The limitation period has not expired and so refusing leave and dismissing the subject application would not necessarily deprive the plaintiff of his cause of action. 

There as is common in such cases, factors which weigh both one way and the other.  Overall, I am satisfied that, notwithstanding the deficiencies with the explanation for delay, the plaintiff ought nevertheless have leave to proceed with the action, which, as I have already observed, is a relatively straight forward one which ought be able to be ready for trial in the not too distant future, provided the plaintiff now more diligently pursues the matter, as he deposes he has both the ability and willingness to do.   I note that the plaintiff, through his solicitor, had started to once again, seek to progress the matter prior to the need for leave being drawn to the plaintiff's solicitor's attention. 

While there has been some years of delay for which the plaintiff is responsible, that has not in my view, substantially affected the prospects of a fair trial.  Nor would the grant of leave substantially prejudice the defendant otherwise.  On balance the plaintiff ought have the relief it now seeks, although it may be appropriate for the Court now to give directions to set a timetable.  I will hear from the parties as to the appropriate minutes of order.  Yes.

MR MEREDITH:  Your Honour, no instructions with regards to further directions in relation to‑‑‑‑‑

HIS HONOUR:  Do you want me to list the matter for mention in the week that I come back or‑‑‑‑‑

MR MEREDITH:  I think that would be appropriate, your Honour.  My instructing solicitors aren't here but I think that would be - that would be wise, your Honour.

HIS HONOUR:  Should I list the matter for directions in the week that I get back?

MR TUCKER:  When might that be, your Honour?

HIS HONOUR:  I am away for two weeks.  That would be - I am back on - the 9th is the first day back but the 9th is a pretty busy day.  The 10th I could do it - no - why not?

ASSOCIATE:  Family Assets, Special Mention and then a P & E matter on the day.

HIS HONOUR:  Oh gees.

ASSOCIATE:  Your first day.

HIS HONOUR:  When is the Special Mention thing on?  What time is that on?

ASSOCIATE:  That says for 9.15.  Actually it could be at the same time. 

HIS HONOUR:  It wouldn't be longer though considering - I wouldn't think.  I could do it - 9 o'clock on the 10th.  I've got another matter at 9.15 and then a trial at 10 so‑‑‑‑‑

MR TUCKER:  Your Honour, it could well be the case that the parties could agree their own directions within that timeframe anyway and if that's the case, we can notify your Associate that that's occurred.  I wouldn't think there is any bard to an agreement being reached.

HIS HONOUR:  My position in that week is that on Monday there is various things on; the Church Service, Opening Law Year and all that sort of stuff and one of my previous Associates is getting admitted and the like so it's a bit of a difficult day.  Tuesday, I have at 9.15 a Directions Hearing and then a 10 o'clock Trial.  On the Wednesday and Thursday currently I am supposed to hear a case in Gatton, a P & E case.  Friday I think is free at the moment, isn't it?

ASSOCIATE:  Currently, yes.

HIS HONOUR:  Friday's a good day.  And then the following week is a standby week.  So you can have the Friday if you like without any hassles at all but - I don't know how quickly you want to get the directions done?

MR MEREDITH:  Well combining the best will of all events then, your Honour, perhaps we should have it set down for 9.30 on the Friday and in the interim we try to agree directions.

HIS HONOUR:  That's probably a good idea.  Am I - am I listed to do the P & E mentions on the Friday though?

ASSOCIATE:  No, your Honour.

HIS HONOUR:  That's a pleasant relief.  What's that date? 

ASSOCIATE:  The 13th - Friday the 13th of July.

HIS HONOUR:  Oh, a good day.  Do you want to save though - any application for costs until then?

MR TUCKER:  Perhaps - perhaps its best if it waits until then, your Honour.

HIS HONOUR:  Okay.

MR TUCKER:  Obviously I think we will have some different things to say about that and‑‑‑‑‑

HIS HONOUR:  Probably so.

MR TUCKER:  And if your Honour wants me to address it now, I'm happy.  But my learned friend wants to stand it over.  I'm happy to abide by your Honour.  I do have submissions on costs here now but I'm happy to - to do that on the 13th.

HIS HONOUR:  I’d probably prefer to do it on the 13th, if that's not too inconvenient for you gentlemen.

MR TUCKER:  That's fine, your Honour.

HIS HONOUR:  Very well.  Well I will simply adjourn to the 13th of July at 9.30. 

MR TUCKER:  Thank you, your Honour.

HIS HONOUR:  Thank you for that.  You are excused.